07-06: HB 818 (2007) Dependent Age Revisions

The General Assembly passed HB 818 during the 2007 legislative session. This bill was subsequently signed by the Governor. Sections 354.536, 376.426, 376.776 RSMo, were revised and those revisions go into effect January 1, 2008.

Insurance Market Regulation Division, provides this bulletin, prior to submission of proposed rules to the Secretary of State’s Office, regarding our enforcement of the dependent age changes to the law. (Sections referenced above)

The division intends to enforce the dependent age language change in the following way:

The obligation will apply to all individual and group health, dental and vision insurance policies required to comply with §§376.426 and 376.776, RSMo and coverage issued by a health maintenance organization required to comply with §354.536 RSMo, if they provide coverage to any resident of this state, upon issuance or renewal on or after January 1, 2008. This is not an extra-territorial requirement. The carriers are also required to provide an enrollment period to those newly qualifying dependents due to this enhanced age requirement that may have already aged off of the policy under prior contract provisions.

“ …and no more than twenty-five years of age;” means at 12:01a.m. on the 25th birthday of the eligible dependent, that person no longer meets the definition of a dependent nor is a plan obligated to continue dependent coverage beyond that date. The department will be enforcing the law and the obligations on insurers and HMOs in this way. An insurer or HMO will have the choice to provide coverage past 12:01 a.m. on the 25th birthday of the dependent.

A dependent entitled to continued coverage under §§376.426, 376.776 or 354.536, RSMo shall be considered residents of the state if such dependent is required to be covered by court order in a divorce decree while the dependent is residing outside of the state of Missouri.

All individual and group health insurance policies and certificates, including coverage issued by an HMO, providing coverage for dependents incapable of self-sustaining employment due to mental or physical handicap shall afford 31 days to provide proof of such incapacity after the dependent’s attained limiting age birthday as stated in the enrollee certificate or contract. (Carriers could still face a court challenge if an enrollee provides the proof of incapacity outside of the 31 day window established by this division’s interpretation.)

The dependent age language differs between §§376.426(17) and 379.930.2(13)RSMo. §376.426(17)RSMo provides a greater benefit to dependents over the language in §379.930.2(13)RSMo. §376.426(17)RSMo does not provide an exemption for small employer plans. Therefore, §376.426(17) RSMo applies to small employer plans as well. Small employer plan dependents are entitled to the increased benefit for dependent coverage found in the language of §376.426(17) RSMo.

The insurer or HMO can require an affirmative election by the insured or certificate holder to continue coverage for an eligible dependent child entitled to continued coverage under §§376.426, 376.776 or 354.536 RSMo. A period for this affirmative action can be no less than 31 days after the dependent’s attainment of limiting age under the contract.

When one insurer’s contract replaces a health benefit plan of similar benefits of another insurer, the dependent’s coverage being continued under §§376.426, 376.776 or 354.536 RSMo shall be allowed to continue under the replacement plan if the dependent is enrolled during the open enrollment period for the new health benefit plan.

The term “provided” as found in §§376.426(17)(c), 376.776.3(3), and 354.536.2(3) will not be interpreted to mean “offered”.